AUDUSD struggles to gain traction amidst the PBoC rate cut and hawkish Fed expectations. The pair is currently facing challenges while gaining momentum. This has resulted in it remaining within a narrow range around the 0.6400 key level. Despite the recent 10 basis point rate cut by the People’s Bank of China (PBoC), the impact on the pair has been minimal.
Additionally, the anticipation of a more hawkish stance from the Federal Reserve is providing support to the USD. This acts as a limiting factor for the gains in AUD/USD. As a result, the pair continues to hover near its lowest level since November 2022.
Disappointing Jobs Data Contribute to AUDUSD Downside Pressure
The Australian dollar faces headwinds due to concerns about China’s economic conditions and disappointing job data in Australia. Furthermore, the overall bullish sentiment surrounding the USD also contributes to capping the potential gains for AUD/USD.
Examining the minutes of the July Federal Open Market Committee (FOMC) meeting, it becomes apparent that the focus remains on combating inflation. There is also a possibility of another rate hike by the end of the year. This stance supports elevated US Treasury bond yields and further strengthens the USD. Traders are treading cautiously ahead of the upcoming Jackson Hole Symposium, which adds to the current market uncertainty.
Taking into account the overarching fundamentals, there is a downside bias for AUD/USD. Any attempts at recovery may be short-lived without any significant economic releases from the US to provide renewed impetus. Traders should therefore watch closely as the AUDUSD struggles to gain traction.
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